Gildan Activewear Achieves Record Q3 Performance, Adjusts Guidance
Gildan Activewear's Remarkable Third Quarter Performance
MONTREAL – Gildan Activewear Inc. (GIL: TSX and NYSE) has reported outstanding results for its third quarter, notably achieving net sales of approximately $911 million. This marks an impressive increase driven by robust growth in the Activewear segment. The company is also pleased to narrow its guidance for adjusted diluted EPS for the full year 2025.
Strong Growth in Activewear Segment
In the latest quarter, Gildan reported an operating margin of 21.1% and an adjusted operating margin reaching 23.2%. The company's GAAP diluted EPS stood at $0.80, with adjusted diluted EPS hitting a record $1.00, highlighting their commitment to sustained profitable growth.
Updated Financial Guidance for 2025
As part of its ongoing strategic focus, Gildan has revised its financial outlook for the remaining fiscal year. The updated guidance reflects a projected revenue growth of mid-single digits, an anticipated adjusted diluted EPS range of $3.45 to $3.51, and an increase in the full year adjusted operating margin.
The Impact of the HanesBrands Acquisition
On August 13, Gildan announced plans for a significant merger with HanesBrands, aiming to create a global leader in basic apparel. This acquisition is projected to close later this year or early next year, promising to enhance Gildan's capabilities and expansive reach within the market.
Financial Highlights and Insights
The company reported that North American distributor sales have remained robust, with Activewear sales reaching $831 million—an increase of 5.4% year-over-year. Despite facing a drop in hosiery and underwear sales to $80 million, a slight dip due to market conditions, international sales also showed resilience.
Strategic Initiatives Contributing to Growth
The effectiveness of Gildan's Sustainable Growth strategy continues to drive their strong financial performance. This model combines operational efficiency with a commitment to reducing costs and enhancing product offerings, including innovations such as soft cotton technology.
Free Cash Flow and Shareholder Returns
Gildan generated approximately $189 million in free cash flow this year and demonstrated a strong commitment to returning value to shareholders. The company conducted share repurchases under its normal course issuer bid (NCIB) program, reiterating its strategy to balance growth with shareholder returns.
Outlook in the Changing Market Landscape
Moving forward, Gildan remains focused on navigating evolving market conditions while optimizing its supply chain and adhering to industry-leading labor and environmental standards. The company is closely monitoring international trade policies, which can impact manufacturing costs and product pricing.
Environmental, Social and Governance (ESG) Achievements
The company has achieved recognition for its ESG initiatives, maintaining its status as one of Canada's Best 50 Corporate Citizens for the fourth consecutive year and being included in TIME's Most Sustainable Companies list.
Quarterly Dividend Declaration
Gildan's Board of Directors declared a cash dividend of $0.226 per share, with payment set for December 15, 2025, to shareholders recorded by November 19, 2025. This reflects the company’s commitment to rewarding shareholders while pursuing strategic growth initiatives.
Conclusion
In summary, Gildan Activewear has had an exceptional third quarter with notable growth in its Activewear segment and strategic initiatives in place to continue its performance trajectory. The anticipated merger with HanesBrands further positions the company for future success in the apparel industry.
Frequently Asked Questions
What are Gildan's recent financial highlights?
Gildan reported record third quarter net sales of $911 million and an adjusted diluted EPS of $1.00.
How has Gildan adjusted its financial guidance for 2025?
The company anticipates revenue growth of mid-single digits and has set adjusted diluted EPS guidance between $3.45 to $3.51.
What is the significance of the HanesBrands acquisition?
The merger with HanesBrands aims to create a leading global basic apparel company, expected to close by early 2026.
How is Gildan performing in the international market?
The company continues to face challenges but has reported international sales of $60 million despite ongoing demand softness.
What are Gildan’s ESG highlights?
Gildan has been recognized as one of Canada's Best 50 Corporate Citizens for its commitment to environmental, social, and governance practices.
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